SB0198

SENATE BILL 198

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Carroll H. Leavell

AN ACT

RELATING TO INSURANCE; AMENDING SECTIONS OF THE NEW MEXICO INSURANCE CODE; PROVIDING FOR CERTAIN FEES; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 59A-4-5 NMSA 1978 (being Laws 1984, Chapter 127, Section 49, as amended) is amended to read:

"59A-4-5. EXAMINATION OF INSURERS.--

A. For the purpose of determining financial condition, fulfillment of contractual obligations, methods of doing business, treatment accorded policyholders and compliance with law, the superintendent shall, as often as [he] the superintendent deems advisable, examine or investigate the affairs, transactions, accounts, records and assets of each authorized insurer and of any other person as to any matter [which] that the superintendent in [his] the superintendent's sole discretion has determined to be relevant to the financial affairs of the insurer or to the examination. Except as expressly otherwise provided, the superintendent shall so examine each domestic insurer not less frequently than every five years. In scheduling and determining the nature, scope and frequency of the examinations, the superintendent may consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, evidence of market practices, policyholder complaints and other criteria as set forth in the handbooks for financial or market conduct examiners adopted by the national association of insurance commissioners in effect when the superintendent exercises discretion under this section.

B. For like purposes, the superintendent shall examine each insurer, or proposed insurer, applying for an initial certificate of authority to transact insurance in this state. The initial examination shall be completed prior to issuance of a certificate of authority.

C. Whenever the superintendent examines the affairs of [any] a domestic insurer, [he] the superintendent may invite the representative of the insurance supervisory agency of at least one other state, if any, in which the insurer is an authorized insurer, to participate in the examination.

D. Until January 1, 1994, in lieu of making [his] the superintendent's own examination of a foreign or alien insurer, the superintendent may accept a full report of an examination of the insurer made by competent examiners as of a date not more than one year prior and participated in by at least two states in which the insurer was authorized to transact insurance. The report shall be certified by the insurance supervisory official of the state under whose jurisdiction the examination was conducted. The superintendent may, at the superintendent's discretion, so accept [such] the report of examination [so made] as of a date more than one year but not more than three years prior; and with respect to an alien insurer, the superintendent may at the superintendent's discretion so accept [such] a report of recent examination made by the insurance supervisory official of the port of entry state of the insurer into the United States without participation therein of another state.

E. After January 1, 1994, examination reports prepared by examiners employed by other state insurance departments may be accepted only if:

(1) made as of a date not more than five years prior to acceptance and the examiner in charge was employed by and under the direction of the insurance commissioners of the insurer's state of domicile or port of entry, which insurance department was at the time of the examination accredited under the financial regulation standards and accreditation program of the national association of insurance commissioners; or

(2) made as of a date not more than three years prior to acceptance and the examination was performed under the supervision of an accredited insurance department or with the participation of one or more examiners who were employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.

F. As far as practical the superintendent shall conduct examination of a foreign or alien insurer in cooperation with the insurance supervisory officials of other states in which the insurer is authorized to transact business."

SECTION 2. Section 59A-4-6 NMSA 1978 (being Laws 1984, Chapter 127, Section 50, as amended) is amended to read:

"59A-4-6. EXAMINERS AND SPECIALISTS.--

A. The superintendent may appoint one or more competent individuals, sufficiently knowledgeable in applicable accounting and operations, as examiners to represent the superintendent in an examination and shall fix the reasonable compensation of the examiners.

B. The superintendent may also employ and fix reasonable compensation of independently contracting accountants knowledgeable of insurance accounting principles and practices, actuaries, attorneys, appraisers and other specialists not otherwise part of the insurance department staff, as the superintendent deems necessary for the examination, the cost of which shall be borne by the company which is the subject of the examination. All specialists shall be under the direction and control of the superintendent.

[C. All examiners and specialists shall be subject to Sections 59A-2-5 and 59A-2-6 NMSA 1978.]"

SECTION 3. Section 59A-4-15 NMSA 1978 (being Laws 1984, Chapter 127, Section 59, as amended) is amended to read:

"59A-4-15. HEARINGS--IN GENERAL.--

A. The superintendent may hold a hearing, without request by others, for any purpose within the scope of the Insurance Code.

B. The superintendent shall hold a hearing:

(1) if required by any other provision of the Insurance Code; or

(2) upon written request for a hearing by a person aggrieved by any act, threatened act or failure of the superintendent to act or by any report, rule [regulation] or order of the superintendent, other than an order for the holding of a hearing or order on hearing or pursuant to such an order on a hearing of which [such] the person had notice.

C. The request for a hearing shall briefly state the respects in which the applicant is so aggrieved, the relief to be sought and the grounds to be relied upon as basis for relief. The request shall be received by the superintendent no later than thirty days from the date of the act, threatened act or failure of the superintendent to act or the date of the superintendent's report, rule or order.

D. If the superintendent finds that the request is made in good faith, that the applicant would be so aggrieved if the stated grounds are established and that such grounds otherwise justify the hearing, the superintendent shall commence the hearing within ninety days after filing of the request, unless postponed by mutual consent.

E. Pending the hearing and decision thereon, the superintendent may suspend or postpone the effective date of the action as to which the hearing is requested. If upon request the superintendent refuses to grant such suspension or postponement, the person requesting the hearing may apply to the district court of Santa Fe county for a stay of the superintendent's action or proposed action pending the hearing and the superintendent's order thereon.

F. Except as otherwise expressly provided, this section does not apply to hearings relative to matters arising under Chapter 59A, Article 17 NMSA 1978."

SECTION 4. Section 59A-6-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 101, as amended) is amended to read:

"59A-6-1. FEE SCHEDULE.--The superintendent shall collect the following fees:

A. insurer's certificate of authority -

(1) filing application for certificate of authority, and issuance of certificate of authority, if issued, including filing of all charter documents, financial statements, service of process, power of attorney, examination reports and other documents included with and part of the application. . . . . . . . . . . . . . . . . . . . . .$1,000.00

(2) annual continuation of certificate of authority, per kind of insurance [each year

continued]. . . . . . . . . . . . . . . . . . . . . . . .200.00

(3) reinstatement of certificate of authority (Section 59A-5-23 NMSA 1978). . . . . . . . . . . . . . .150.00

(4) amendment to certificate of

authority. . . . . . . . . . . . . . . . . . . . . . . . 200.00

B. charter documents - filing amendment to any charter document (as defined in Section 59A-5-3

NMSA 1978). . . . . . . . . . . . . . . . . . . . . . . . 10.00

C. annual statement of insurer, filing. . . .200.00

D. service of process, acceptance by superintendent and issuance of certificate of service, where issued. . . 10.00

E. agents' licenses and appointments -

(1) filing application for original agent license and issuance of license, if issued. . . . . . . . 30.00

(2) appointment of agent -

(a) filing appointment, per kind of insurance, each insurer. . . . . . . . . . . . . . . . . .20.00

(b) annual continuation of appointment, each insurer [each year continued]. . . . . . . . . . . . 20.00

(3) variable annuity agent's license -

(a) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . 30.00

(b) annual continuation of appointment [each year]. . . . . . . . . . . . . . . . . . . . . . . .20.00

(4) temporary license -

(a) as to life and health insurance or both. . . . . . . . . . . . . . . . . . . . . . . . . . . 30.00

[(a)] (b) as to property insurance.30.00

[(b)] (c) as to casualty/surety

insurance. . . . . . . . . . . . . . . . . . . . . . . . .30.00

[(c)] (d) as to vehicle insurance. 30.00

F. agency license and affiliations -

(1) filing application for original agency business entity license and issuance of license, if

issued . . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(2) filing of individual affiliation, per kind of insurance . . . . . . . . . . . . . . . . . . . . . . .20.00

(3) annual continuation of individual affiliation. . . . . . . . . . . . . . . . . . . . . . . .20.00

[F.] G. solicitor license -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . . 30.00

(2) annual continuation of appointment, per kind of insurance [each year]. . . . . . . . . . . . . . .20.00

[G.] H. broker license -

(1) filing application for license and issuance of original license, if issued. . . . . . . . . .30.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

[H.] I. insurance vending machine license -

(1) filing application for original license and issuance of license, if issued, each machine. . . . . 25.00

(2) annual continuation of license, each

machine. . . . . . . . . . . . . . . . . . . . . . . . . .25.00

[I.] J. examination for license, application for examination conducted directly by superintendent, each grouping of kinds of insurance to be covered by the examination as provided by the superintendent's rules, and payable as to each instance of examination. . . . . . . . . . . . . . . . . .50.00

[J.] K. surplus [line] lines insurer - filing application for qualification as eligible surplus lines

insurer. . . . . . . . . . . . . . . . . . . . . . . . 1,000.00

[K.] L. surplus [line] lines broker license -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . .100.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . 100.00

M. surplus lines broker license and affiliations -

(1) filing application for original surplus [line] lines brokerage business entity license and issuance of license, if issued . . . . . . . . . . . . . . . . . . . 100.00

(2) filing of individual affiliation per kind of insurance . . . . . . . . . . . . . . . . . . . . . . .20.00

(3) annual continuation of individual affiliation. . . . . . . . . . . . . . . . . . . . . . . .20.00

[L.] N. adjuster license -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . . 30.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

O. insurance consultant license -

(1) filing application for original license and issuance of license, if issued . . . . . . . . . . . .50.00

(2) application examination. . . . . . . 10.00

(3) biennial continuation of license . .100.00

P. viatical settlements license -

(1) providers -

(a) filing application for original license and issuance of license, if issued . . . . . . 1,000.00

(b) annual continuation of

license . . . . . . . . . . . . . . . . . . . . . . . . .200.00

(2) brokers -

(a) filing application for original license and issuance of license, if issued . . . . . . . 100.00

(b) annual continuation of

license . . . . . . . . . . . . . . . . . . . . . . . . 100.00

(3) brokerages -

(a) filing application for original license and issuance of license, if issued . . . . . . . 100.00

(b) annual continuation of license.20.00

(d) annual continuation of individual affiliation . . . . . . . . . . . . . . . . . . . . . . . 20.00

[M.] Q. rating organization or rating advisory organization license -

(1) filing application for license and issuance of license, if issued. . . . . . . . . . . . . .100.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . 100.00

[N.] R. nonprofit health care plans -

(1) filing application for preliminary permit and issuance of permit, if issued. . . . . . . . . . . . 100.00

(2) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers

(3) annual statement, filing. . . . . . 200.00

(4) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00

(b) examination for license conducted directly by superintendent, each instance of

examination. . . . . . . . . . . . . . . . . . . . . . . .50.00

appointment. . . . . . . . . . . . . . . . . . . . . . . .20.00

[O.] S. prepaid dental plans -

(1) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers

(2) annual report, filing. . . . . . . .200.00

(3) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00

(b) examination for license conducted directly by superintendent, each instance of

examination. . . . . . . . . . . . . . . . . . . . . . . .50.00

[P.] T. prearranged funeral insurance - application for certificate of authority, issuance, continuation, reinstatement, charter documents, filing annual statement, licensing of sales representatives - same as for insurers

[Q.] U. premium finance companies -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . .100.00

(2) annual renewal of license. . . . . .100.00

[R.] V. motor clubs -

(1) certificate of authority -

(a) filing application for original certificate of authority and issuance of certificate of authority, if issued. . . . . . . . . . . . . . . . . . .200.00

(b) annual continuation of certificate of authority. . . . . . . . . . . . . . . . . . . . . . .100.00

(2) sales representatives -

(a) filing application for registration or license and issuance of registration or license, if issued, each representative. . . . . . . . . . . . . . . . . . . .20.00

(b) annual continuation of registration or license, each representative. . . . . . . . . . . . . .20.00

[S.] W. bail bondsmen -

(1) filing application for original license as bail bondsman or solicitor, and issuance of license, if

issued. . . . . . . . . . . . . . . . . . . . . . . . . . 30.00

(2) examination for license conducted directly by superintendent, each instance of

examination. . . . . . . . . . . . . . . . . . . . . . . .50.00

(3) annual continuation of appointment [each

year]. . . . . . . . . . . . . . . . . . . . . . . . . . .20.00

[T.] X. securities salesperson license -

(1) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . 25.00

(2) annual renewal of license

[each year] . . . . . . . . . . . . . . . . . . . . . . . 25.00

[U. for each signature and seal of the superintendent affixed to any instrument. . . . . . . . . 10.00

V.] Y. required filing of forms or rates - by all lines of business other than property or casualty -

(1) rates. . . . . . . . . . . . . . . . 50.00

(2) major form - each new policy and each package submission, which can include multiple policy forms, application forms, rider forms, endorsement forms or amendment forms. . . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(3) incidental forms and rates - forms filed for informational purposes; riders, applications, endorsements and amendments filed individually; rate service organization reference filings; rates filed for informational purposes.15.00

[W.] Z. health maintenance organizations -

(1) filing an application for a certificate of authority. . . . . . . . . . . . . . . . . . . . . . . 1,000.00

(2) annual continuation of certificate of authority [each year continued]. . . . . . . . . . . . . 200.00

(3) filing each annual report . . . . 200.00

(4) filing an amendment to organizational documents requiring approval. . . . . . . . . . . . . . .200.00

(5) filing informational

amendments. . . . . . . . . . . . . . . . . . . . . . . . 50.00

(6) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00

(b) examination for license, each instance of examination. . . . . . . . . . . . . . . . . .50.00

appointment . . . . . . . . . . . . . . . . . . . . . . . 20.00

[X.] AA. purchasing groups and foreign risk retention groups -

(1) original registration. . . . . . . .500.00

(2) annual continuation of

registration. . . . . . . . . . . . . . . . . . . . . . .200.00

(3) agent or broker fees - same as for authorized insurers

[Y.] BB. third party administrators -

(1) filing application for original individual insurance administrator license. . . . . . . . . . . . . .30.00

(2) filing application for original officer, manager or partner insurance administrator

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(3) annual continuation or renewal of [annual]

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(4) examination for license conducted directly by the superintendent, each examination. . . . . . . . . .75.00

(5) [each request for a duplicate license or for each name change. . . . . . . . . . . . . . . . . . . 30.00

(6)] filing of annual report. . . . . . .50.00

CC. miscellaneous fees -

(1) duplicate license . . . . . . . . . .30.00

(2) name change . . . . . . . . . . . . .30.00

(3) for each signature and seal of superintendent affixed to any instrument . . . . . . . . 10.00.

An insurer shall be subject to additional fees or charges, termed retaliatory or reciprocal requirements, whenever form or rate-filing fees in excess of those imposed by state law are charged to insurers in New Mexico doing business in another state or whenever a condition precedent to the right to issue policies in another state is imposed by the laws of that state over and above the conditions imposed upon insurers by the laws of New Mexico; in those cases, the same form or rate-filing fees may be imposed upon an insurer from another state transacting or applying to transact business in New Mexico so long as the higher fees remain in force in the other state. If an insurer does not comply with the additional retaliatory or reciprocal requirement charges imposed under this subsection, the superintendent may refuse to grant or may withdraw approval of the tendered form or rate filing.

All fees are earned when paid and are not refundable."

SECTION 5. Section 59A-10-5 NMSA 1978 (being Laws 1984, Chapter 127, Section 165) is amended to read:

"59A-10-5. DEPOSITORIES DESIGNATED BY TREASURER.--The state treasurer may designate any solvent trust company or other solvent financial institution having trust powers [domiciled] and with offices located in this state, as the state treasurer's depository to receive and hold any general, special or excess deposit of an insurer under [this article] Chapter 59A, Article 10 NMSA 1978. The deposit shall be so handled at the expense, if any, of the insurer, and the state of New Mexico shall not be responsible for safekeeping thereof."

SECTION 6. Section 59A-11-8 NMSA 1978 (being Laws 1984, Chapter 127, Section 187, as amended) is amended to read:

"59A-11-8. ISSUANCE, REFUSAL OF LICENSE.--If the superintendent finds that the application is complete, that the applicant has passed all required examinations and is otherwise qualified for the license applied for, the superintendent shall promptly issue, or permit the issuance of, the license. Otherwise, the superintendent shall refuse to issue, or to permit the issuance of, the license and shall promptly notify the applicant and the appointing insurer, employer or principal, where applicable, of the refusal and state the grounds for refusal."

SECTION 7. Section 59A-11A-3 NMSA 1978 (being Laws 1989, Chapter 97, Section 3) is amended to read:

"59A-11A-3. INSURANCE CONSULTANT LICENSE--APPLICATION--REQUIREMENTS FOR ISSUANCE--FEE--RENEWAL.--

A. The superintendent shall issue a license as an insurance consultant to [any] a person who:

(1) has reached the age of majority;

(2) files a written application in the manner and form prescribed by the superintendent, stating the lines of insurance for which the applicant desires [such] a license;

(3) passes an examination as provided in Subsection B of this section;

(4) pays an application fee [of fifty dollars ($50.00)] and an examination fee [of ten dollars ($10.00)] as specified in Section 59A-6-1 NMSA 1978; and

(5) satisfies the superintendent that [he] the person is competent, financially responsible and of good moral character.

B. The superintendent shall examine all initial applicants for a license as an insurance consultant in [such] the manner and form [as] that the superintendent prescribes. The examination shall be of sufficient scope to demonstrate a broad knowledge of insurance contracts and the practices of the insurance industry in the lines of insurance for which the applicant desires [such] a license. However, the superintendent may waive the requirement for the examination for:

(1) property and casualty insurance in the case of an applicant who has been awarded the professional designation of chartered property and casualty underwriter or certified insurance counselor in the property and casualty line;

(2) life and accident insurance in the case of an applicant who has been awarded the professional designation of chartered life underwriter; and

(3) all lines of insurance in the case of an applicant who has been awarded the professional designations of chartered property and casualty underwriter and chartered life underwriter.

C. If an applicant fails [any] an examination, [he] the applicant may be reexamined upon payment of a ten-dollar ($10.00) examination fee for each [such] reexamination.

D. The license as an insurance consultant shall be issued for two years. The license may, [in] at the discretion of the superintendent, be renewed biennially upon application and payment of a fee [of one hundred dollars ($100)] as specified in Section 59A-6-1 NMSA 1978."

SECTION 8. Section 59A-13-2 NMSA 1978 (being Laws 1984, Chapter 127, Section 230, as amended) is amended to read:

"59A-13-2. DEFINITIONS.--

A. For the purposes of the Insurance Code:

(1) "adjuster" is a person that:

(a) investigates, negotiates, settles or adjusts a loss or claim arising under an insurance contract on behalf of an insurer, insured or self-insurer, for a fee, commission or other compensation; however, an adjuster acting on behalf of an insured shall not investigate, negotiate, settle or adjust a claim involving personal injury to the insured; and

(b) advises the insured of the insured's rights to settlement and the insured's rights to settle, arbitrate and litigate the dispute;

(2) "staff adjuster" is an adjuster individual who is a salaried employee of an insurer or affiliates of the employer insurer, representing and adjusting claims solely under policies of the employer insurer; [and]

(3) "independent adjuster" is an adjuster who is not a staff adjuster and includes a representative and an employee of an independent adjuster; and

(4) "resident adjuster" is an adjuster who resides principally in New Mexico and who conducts business primarily in New Mexico.

B. Except as otherwise provided, "adjuster" does not include:

(1) an attorney-at-law who adjusts insurance losses or claims from time to time incidental to practice of law and who does not advertise or represent as an adjuster;

(2) a licensed agent or general agent of an authorized insurer or an employee of an agent or general agent who adjusts claims or losses under specific authority from the insurer and solely under policies issued by the insurer;

(3) an agent or employee of a life or health insurer who adjusts claims or losses under the insurer's policies or contracts to administer policies or benefits of that type; or

(4) a salaried or part-time claims agent or investigator employed by a self-insured person."

SECTION 9. Section 59A-13-9 NMSA 1978 (being Laws 1984, Chapter 127, Section 237, as amended) is amended to read:

"59A-13-9. PLACE OF BUSINESS.--[A licensed]

A. A resident adjuster shall have and maintain a principal place of business in [the] this state that is easily accessible to the public and is the place where the adjuster principally conducts transactions under the license. The address of the principal place of business shall appear on the application for license and on the license. [The licensee]

B. An adjuster shall promptly notify the superintendent of a change of address [of the principal place of business]. Failure to notify the superintendent of a change of address within twenty days shall subject the licensee to a penalty in the amount of fifty dollars ($50.00)."

SECTION 10. Section 59A-14-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 239, as amended) is amended to read:

"59A-14-1. SCOPE OF ARTICLE--PURPOSE--NECESSITY FOR REGULATION.--

A. Chapter 59A, Article 14 NMSA 1978 governs the placing of insurance of New Mexico risks, through licensed surplus [line] lines brokers, in insurers not otherwise authorized to transact insurance in this state and subject to the conditions for such placing as stated in that article; qualifications, licensing and duties and responsibilities of surplus [line] lines brokers; and other provisions as to such surplus [line] lines business and brokers. As to unauthorized insurers in general, and in respects other than as to surplus [line] lines, refer to Chapter 59A, Article 15 NMSA 1978.

B. Chapter 59A, Article l4 NMSA 1978 shall not apply as to reinsurance or to the following insurances [when placed by general lines agents or surplus line brokers licensed as such by this state]:

(1) wet marine and transportation insurance, as defined in Section 59A-7-5 NMSA 1978;

(2) insurance of subjects located, resident or to be performed wholly outside this state or on vehicles or aircraft owned and principally garaged outside this state;

(3) insurance of property and operations of railroads engaged in interstate commerce;

(4) insurance of aircraft of common carriers, or cargo of such aircraft, or against liability, other than employer's liability, arising out of ownership, maintenance or use of such aircraft;

(5) insurance of automobile bodily injury and property damage liability risks when written in Mexican insurers and covering in Mexico and not in the United States; or

(6) insurance independently procured.

C. Chapter 59A, Article 14 NMSA 1978 shall be liberally construed and applied to promote its underlying purposes, which include:

(1) protecting insureds and persons seeking insurance in this state;

(2) permitting surplus lines insurance to be placed with reputable and financially sound unauthorized insurers, but only pursuant to Chapter 59A, Article 14 NMSA 1978;

(3) establishing a system of regulation that will permit controlled access to surplus lines insurance in this state; and

(4) assuring collection of revenues and other amounts due to this state."

SECTION 11. Section 59A-14-7 NMSA 1978 (being Laws 1984, Chapter 127, Section 245, as amended by Laws 1999, Chapter 272, Section 19 and also by Laws 1999, Chapter 289, Section 21) is amended to read:

"59A-14-7. SURPLUS [LINE] LINES BROKER LICENSE REQUIRED--QUALIFICATIONS FOR LICENSE.--

A. No person shall in New Mexico be, act as or hold out to be, a surplus [line] lines broker, or place insurance of risks resident, located or to be performed in New Mexico in any unauthorized insurer on behalf of others and for compensation as an independent contractor in any form, unless licensed as a surplus [line] lines broker under Chapter 59A, Article 14 NMSA 1978.

B. The superintendent shall, upon due application and payment of the license fee, issue a license as surplus [line] lines broker to a person qualified as follows:

(1) [must be currently licensed as an insurance agent in this state as to the kinds of insurance to be exported under the surplus line broker license applied for, and] if the applicant is an individual, the individual must have had experience or special training or education sufficient in duration and character [as such an agent as] to render the applicant, in the opinion of the superintendent, reasonably competent to engage in business as a surplus [line] lines broker; and

(2) if the applicant is a firm or corporation, all individuals to represent it as a surplus lines broker in this state must be licensed [agents. Each such individual shall be qualified as for an individual license as surplus line broker, and an additional license fee shall be paid as to each individual, in excess of one, who is to exercise the surplus line broker license powers; and

(3) must file with the application the bond provided for in Section 59A-14-8 NMSA 1978] surplus lines brokers.

C. Licensing procedure, duration and related matters are as provided in Chapter 59A, Article 11 NMSA 1978, and license fee is as specified in Section 59A-6-1 NMSA 1978."

SECTION 12. Section 59A-14-14 NMSA 1978 (being Laws 1991, Chapter 125, Section 18) is amended to read:

"59A-14-14. EVIDENCE OF INSURANCE--POLICY CHANGES--PENALTIES.--

A. Upon placing surplus lines insurance, the surplus lines broker shall promptly deliver to the insured evidence of the insurance consisting either of the policy or, if the policy is not then available, a certificate complying with Subsection D of this section, a cover note, a binder or other evidence of insurance. The certificate, cover note, binder or other evidence of insurance shall be completed and signed by the surplus lines broker and shall set forth the description and location of the subject of the insurance, [the coverages, including any material limitations other than those in standard forms] the coverage limits, [the amount of any deductible, the premium and rate charged, the taxes to be collected from the insured] the name and address of the insured, the name and address of the surplus lines insurer [the proportion of the entire risk assumed by each insurer] and the name, address and telephone number of the surplus lines broker.

B. No surplus lines broker shall issue or deliver any evidence of insurance or purport to insure or represent that insurance will be or has been written by any eligible surplus lines insurer without the insurer's prior written authorization, via telefax or otherwise, to cause the risk to be insured or documentation from the insurer in the regular course of business that such insurance has been granted.

C. If, after delivery of any evidence of insurance, there is any change in the identity of the insurer, in the proportion of the risk assumed by any insurer or in the coverage, terms or conditions stated in the original evidence of insurance, the surplus lines broker shall promptly issue and deliver to the insured, either directly or through the producing broker, an appropriate substitute for or endorsement of the original document, accurately showing the current status of the coverage and responsible insurers.

D. As soon as reasonably possible after the placement of any surplus lines insurance, and in no event later than thirty days after coverage commences, the surplus lines broker shall deliver a complete copy of the policy or, if the policy is not then available, a certificate of insurance to the insured to replace any evidence of insurance [theretofore] previously issued. Each [certificate or] policy of insurance shall contain or have attached thereto a complete record of all policy declarations and limits, insuring agreements, deductible amounts, conditions, exclusions, clauses, endorsements and all other material terms and conditions.

E. Any surplus lines broker who fails to comply with the requirements of this section shall be subject to the penalties provided in Section 59A-1-18 NMSA 1978 or to any greater applicable penalty otherwise provided by law."

SECTION 13. Section 59A-17-34 NMSA 1978 (being Laws 1984, Chapter 127, Section 329, as amended) is amended to read:

"59A-17-34. HEARING AND REVIEW AS TO SUPERINTENDENT'S ACTIONS.--

A. Any person aggrieved by any action, threatened action, or failure to act of the superintendent or otherwise under Chapter 59A, Article 17 NMSA 1978 shall have the same right to a hearing before the superintendent with respect thereto as provided for in general under Section 59A-4-15 NMSA 1978. Notice of hearing shall be given, the hearing conducted, rights and powers exercised and the superintendent's order on hearing made and given as provided as to hearings in general under the applicable provisions of Chapter 59A, Article 4 NMSA 1978.

B. Any person aggrieved by the superintendent's order [on such hearing] issued pursuant to this section or by the superintendent's refusal to hold the hearing may request a review by the public regulation commission in the manner set forth by rule of the commission. The request for review shall be filed no later than thirty days after the issuance of the order of the superintendent or the superintendent's refusal to hold a hearing."

SECTION 14. Section 59A-18-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 331, as amended) is amended to read:

"59A-18-1. SCOPE OF ARTICLE.--Chapter 59A, Article 18 NMSA 1978 applies as to all insurance policies and annuity contracts of authorized insurers covering individuals resident, or risks located, or insurance protection to be rendered in this state, other than:

A. reinsurance;

B. policies or contracts not issued for delivery in this state nor delivered in this state, except for contracts for or endorsements of workers' compensation insurance when the workers' compensation risk insured arises from the employment of a worker performing work for an employer in New Mexico and that employer is not domiciled in New Mexico;

C. wet marine and transportation insurance, as defined in Section 59A-7-5 NMSA 1978; or

D. surplus [line] lines insurance contracts, unless such contracts are specifically included by rule."

SECTION 15. Section 59A-20A-3 NMSA 1978 (being Laws 1999, Chapter 246, Section 3, as amended) is amended to read:

"59A-20A-3. LICENSE REQUIREMENTS--FEES.--

A. A person shall not operate as a provider or broker without a license from the superintendent.

B. Application for a provider or broker license shall be made to the superintendent by the applicant on a form prescribed by the superintendent.

C. An application or renewal shall be accompanied by [the following fee:

(1) for initial license as a provider, one thousand dollars ($1,000);

(2) for initial license as a broker, one hundred dollars ($100);

(3) for renewal of a provider's license, two hundred dollars ($200); and

(4) for renewal of a broker's license, one hundred dollars ($100)] the applicable fee as specified in Section 59A-6-1 NMSA 1978.

D. Licenses may be renewed from year to year on the anniversary date of licensure upon payment of the annual renewal fee. Failure to pay the fee by the renewal date shall result in revocation of the license.

E. The applicant shall provide information on forms required by the superintendent. The superintendent may require the applicant to fully disclose the identity of all stockholders, partners, officers, members and employees and representatives, and the superintendent may refuse to issue a license if not satisfied that a stockholder, partner, officer, member, employee or representative who may materially influence the applicant's conduct meets the standards of the Viatical Settlements Act.

F. A license issued to an applicant authorizes all members, officers, representatives and designated employees to act as providers or brokers, as applicable, under the license, and all those persons shall be named in the application and any supplements to the application.

G. Upon the filing of an application and the payment of the license fee, the superintendent may make an investigation of each applicant and issue a license if the superintendent finds that the applicant:

(1) has provided a detailed plan of operation;

(2) is competent and trustworthy and intends to act in good faith in the capacity provided by the license applied for;

(3) has a good business reputation and has had experience, training or education so as to be qualified in the business for which licensure is sought; and

(4) if not a natural person, provides a certificate of good standing from the state of its domicile.

H. The superintendent shall not issue a license to an applicant unless a written designation of an agent for service of process is filed and maintained with the superintendent or the applicant has filed with the superintendent the applicant's written irrevocable consent that any action against the applicant may be commenced by service of process on the superintendent."

SECTION 16. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.

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